B-97585, SEPTEMBER 14, 1950, 30 COMP. GEN. 101

B-97585: Sep 14, 1950

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BIDS - MISTAKES - ALLEGATION OF ERROR PRIOR TO AWARD WHERE THE FAILURE OF A LOW BIDDER TO INCLUDE FEDERAL EXCISE TAXES IN HIS BID PRICE WAS DUE TO HIS INEXPERIENCE IN CONTRACTING WITH THE UNITED STATES. THE ERROR WAS ALLEGED AND EXPLAINED PRIOR TO AWARD OF THE CONTRACT. PROVIDED THE CORRECTED BID IS STILL THE LOWEST BID RECEIVED. 1950: I HAVE YOUR LETTER OF AUGUST 16. IN VIEW OF AN ERROR ALLEGED BY THE COMPANY TO HAVE BEEN MADE IN ITS BID. THE FACTS RELATIVE TO THE MATTER ARE SET FORTH IN YOUR LETTER. (THE FILE NUMBER WAS INCORRECTLY STATED IN THE INVITATION. WAS REQUESTED BY TELEGRAM OF APRIL 17. FOUR BIDS WERE RECEIVED. THE LOWEST ACCEPTABLE BID OF WHICH WAS THAT OF THE CRAIG FREDERICK CHEVROLET COMPANY OF GOLDEN.

B-97585, SEPTEMBER 14, 1950, 30 COMP. GEN. 101

BIDS - MISTAKES - ALLEGATION OF ERROR PRIOR TO AWARD WHERE THE FAILURE OF A LOW BIDDER TO INCLUDE FEDERAL EXCISE TAXES IN HIS BID PRICE WAS DUE TO HIS INEXPERIENCE IN CONTRACTING WITH THE UNITED STATES, AND THE ERROR WAS ALLEGED AND EXPLAINED PRIOR TO AWARD OF THE CONTRACT, PAYMENT OF AN AMOUNT IN EXCESS OF THE ACCEPTED LOW BID PRICE MAY BE MADE, PROVIDED THE CORRECTED BID IS STILL THE LOWEST BID RECEIVED.

COMPTROLLER GENERAL WARREN TO THE ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION, SEPTEMBER 14, 1950:

I HAVE YOUR LETTER OF AUGUST 16, 1950, WITH ENCLOSURES, REQUESTING A DECISION AS TO WHETHER THE CRAIG-FREDERICK CHEVROLET COMPANY, GOLDEN, COLORADO, MAY BE PAID AN AMOUNT IN EXCESS OF THAT SPECIFIED IN ITS BID OPENED ON APRIL 21 AND ACCEPTED ON APRIL 27, 1950, IN VIEW OF AN ERROR ALLEGED BY THE COMPANY TO HAVE BEEN MADE IN ITS BID.

THE FACTS RELATIVE TO THE MATTER ARE SET FORTH IN YOUR LETTER, IN PART, AS FOLLOWS:

BY TELEGRAMS DATED APRIL 17, 1950, THE FEDERAL SUPPLY SERVICE OF THE ADMINISTRATION REQUESTED BIDS FROM VARIOUS MANUFACTURERS AND DEALERS FOR THE FURNISHING TO THE GOVERNMENT OF NINE 8700 GVW TRUCKS, POWER WAGONS, BY NOT LATER THAN MAY 15, 1950. THE INVITATION STATED THAT BIDS WOULD BE RECEIVED UNTIL 2 P.M. ON APRIL 21, 1950, AND THEN PUBLICLY OPENED; THAT THE CONDITIONS OF U.S. STANDARD FORM 33 WOULD APPLY; AND THAT BIDDERS SHOULD REFER TO FILE 4G-85724. (THE FILE NUMBER WAS INCORRECTLY STATED IN THE INVITATION, THE PROPER INVITATION NUMBER BEING 4G-85124.) SINCE THE INVITATION SPECIFIED THAT DELIVERY OF THE VEHICLES WOULD BE REQUIRED AT DENVER, COLORADO, THE DENVER OFFICE OF THE BUREAU OF RECLAMATION, DEPARTMENT OF THE INTERIOR, WAS REQUESTED BY TELEGRAM OF APRIL 17, 1950, TO ISSUE THE IDENTICAL INVITATION (BEARING THE SAME INCORRECT INVITATION NUMBER) TO ALL LOCAL TRUCK DEALERS. IN RESPONSE TO THE INVITATION, FOUR BIDS WERE RECEIVED, THE LOWEST ACCEPTABLE BID OF WHICH WAS THAT OF THE CRAIG FREDERICK CHEVROLET COMPANY OF GOLDEN, COLORADO, IN THE AMOUNT OF $3,131.63 PER UNIT. THE NEXT LOWEST BIDDER QUOTED A PRICE OF $3,198.45 PER UNIT.

ON SATURDAY, APRIL 22, 1950, A PURCHASING OFFICER OF THE FEDERAL SUPPLY SERVICE HAVING NO KNOWLEDGE OF THE ABOVE INVITATION CONTACTED THE CRAIG- FREDERICK CHEVROLET COMPANY BY TELEPHONE FOR THE PURPOSE OF VERIFYING THE INCLUSION OF THE FEDERAL EXCISE TAX IN THE COMPANY'S BID UNDER ANOTHER INVITATION. AS A RESULT OF THIS TELEPHONE CONVERSATION, THE SUPPLIER STATED THAT THE PRICES QUOTED IN THE QUESTIONED BID AND IN ITS BID UNDER INVITATION "4G-85724" WERE EXCLUSIVE OF THE FEDERAL EXCISE TAX, NOTWITHSTANDING THE FACT THAT THE TAX CLAUSE OF THE GENERAL CONDITIONS OF STANDARD FORM 33 REQUIRED BIDDERS TO INCLUDE FEDERAL EXCISE TAXES IN THEIR BID. THE SUPPLIER ALLEGES THAT IT WAS ADVISED IN THE FOREGOING TELEPHONE CONVERSATION TO WIRE A CORRECTION TO BOTH OF ITS BIDS THEN PENDING IN THE FEDERAL SUPPLY SERVICE AND THAT SUCH CORRECTIONS WOULD BE ACCEPTED IF RECEIVED EARLY ON MONDAY MORNING APRIL 24, 1950. PURSUANT TO SUCH ALLEGED INSTRUCTIONS THE SUPPLIER WIRED THE FEDERAL SUPPLY SERVICE ON APRIL 22, 1950, THAT ITS BID PRICE UNDER INVITATION "4G-85724" SHOULD BE INCREASED BY THE SUM OF $52.19 PER UNIT, THE AMOUNT OF THE APPLICABLE FEDERAL EXCISE TAX. (SEE ATTACHED STATEMENT OF PURCHASING OFFICER.)

IN THE MEANTIME THE FEDERAL SUPPLY SERVICE HAD DISCOVERED ITS MISTAKE IN THE INVITATION NUMBER AND HAD CHANGED ITS RECORDS WITH RESPECT THERETO FROM " INVITATION 4G-85724" TO " INVITATION 4G-85124.' SINCE THE SUPPLIER'S TELEGRAM OF APRIL 22, 1950, REFERRED TO INVITATION 4G-85724, IT WAS IMPROPERLY FILED AND THEREFORE NOT BROUGHT TO THE ATTENTION OF THE CONTRACTING OFFICER BEFORE HE AWARDED THE CONTRACT TO THE CRAIG-FREDERICK CHEVROLET COMPANY ON APRIL 27, 1950, AND DULY ADVISED THE CONTRACTOR BY TELEGRAM OF EVEN DATE TO PROCEED WITH DELIVERY UNDER THE CONTRACT. UPON SUBSEQUENTLY BEING FURNISHED WITH FORMAL CONTRACT DOCUMENTS FOR EXECUTION, THE CONTRACTOR RETURNED THE DOCUMENTS UNEXECUTED BY A LETTER DATED MAY 1, 1950, IN WHICH HE REFERRED BRIEFLY TO THE CIRCUMSTANCES SURROUNDING THE ERROR IN THE BID AND REQUESTED THAT THE UNIT PRICE OF THE CONTRACT BE INCREASED BY THE AMOUNT OF THE FEDERAL EXCISE TAX. NEVERTHELESS, THE CONTRACTOR COMMENDED DELIVERIES AS REQUIRED BY THE CONTRACT AND HAS COMPLETED ALL DELIVERIES WITHOUT A FORMAL CONTRACT HAVING BEEN EXECUTED. NO PAYMENT HAS YET BEEN MADE TO THE CONTRACTOR FOR THE DELIVERED VEHICLES.

ON JUNE 21, 1950, THE FEDERAL SUPPLY SERVICE REQUESTED THE CONTRACTOR TO FURNISH A COMPLETE STATEMENT OF THE MANNER IN WHICH THE ALLEGED ERROR IN THE BID OCCURRED. IN REPLY TO THE ABOVE LETTER CONTRACTOR SUBMITTED, UNDER DATE OF JUNE 24, 1950, A LETTER PRESUMABLY FURNISHING COMPLETE DETAILS OF THE BASIS OF THE BID, INCLUDING A SHEET ENTITLED " TRUCK PRICE QUOTATIONS," A COPY OF AN INVOICE OF THE WOEBER AUTO BODY AND MFG. CO. AND A COPY OF AN INVOICE FROM ART NALNATI, INC.

THE CRAIG-FREDERICK CHEVROLET COMPANY STATES, IN ITS LETTER OF JUNE 24, 1950, THAT ITS ERROR IN REMOVING THE AMOUNT OF FEDERAL EXCISE TAX FROM ITS BID OCCURRED THROUGH ITS INEXPERIENCE IN BIDDING ON GOVERNMENT CONTRACTS; THAT THE INSTANT BID AND ITS BID ON INVITATION NO. 4G-83462 WERE ITS FIRST EXPERIENCE IN BIDDING ON CONTRACTS WITH THE FEDERAL GOVERNMENT; THAT IT WAS UNDER THE IMPRESSION THAT THE FEDERAL GOVERNMENT DID NOT PAY FEDERAL EXCISE TAXES; AND THAT IT HAD SUPPLIED CITIES, STATES, COUNTIES, AND POLITICAL SUBDIVISIONS FOR YEARS AND ALL ARE EXEMPT FROM THE TAX. THE PHOTOSTATIC COPY ENTITLED " TRUCK PRICE QUOTATIONS" SUBMITTED WITH SAID LETTER IN SUPPORT OF ITS ALLEGED ERROR SHOWS IN DETAIL HOW THE BID PRICE OF $3,131.63 PER UNIT WAS COMPUTED, AND THAT THERE WAS DEDUCTED IN SUCH COMPUTATION THE AMOUNT OF $52.19 TO REMOVE FROM THE ITEMS OF COST OF THE AMOUNT OF FEDERAL EXCISE TAX INCLUDED THEREIN. THUS, THERE APPEARS NO DOUBT THAT THE BID PRICE OF $3,131.63 DID NOT INCLUDE THE FEDERAL EXCISE TAX AS ALLEGED BY THE COMPANY.

WHILE THE TELEGRAPHIC INVITATION PROVIDED THAT THE CONDITIONS OF U.S. STANDARD FORM 33 WOULD APPLY AND WHILE SAID FORM REQUIRES BIDDERS TO INCLUDE FEDERAL EXCISE TAXES, NEVERTHELESS, IT APPEARS THAT THE BIDDER DID NOT HAVE A COPY OF SAID FORM AND WAS NOT AWARE OF THE REQUIREMENT THAT FEDERAL EXCISE TAXES WERE REQUIRED TO BE INCLUDED IN THE BID PRICE. FURTHERMORE, IT APPEARS THAT THE COMPANY IS A SMALL BUSINESS LOCATED IN A SMALL TOWN WHERE THE FORM WAS NOT READILY AVAILABLE AND THAT THE COMPANY HAD LESS THAN FIVE DAYS IN WHICH TO SUBMIT ITS BID.

UNDER THE FACTS AND CIRCUMSTANCES INVOLVED, AND SINCE ERROR WAS ALLEGED PRIOR TO AWARD AND EVIDENCE WAS SUBMITTED BY THE COMPANY ESTABLISHING THE ERROR, THIS OFFICE WILL NOT BE REQUIRED TO OBJECT TO THE PAYMENT OF THE AMOUNT OF $52.19 PER UNIT, THE AMOUNT SHOWN TO HAVE BEEN DEDUCTED AS REPRESENTING FEDERAL EXCISE TAX, IN ADDITION TO THE BID PRICE OF $3,131.63 PER UNIT, SAID AMOUNT BEING LOWER THAN THE NEXT LOWEST BID RECEIVED.

A REFERENCE TO THIS DECISION SHOULD BE MADE ON THE VOUCHER, OR VOUCHERS, COVERING PAYMENT UNDER AUTHORITY THEREOF.